Indian oil and gas industry sought natural gas to be included in GST
New Delhi:
The country’s oil and gas industry has urged the government to bring natural gas under the Goods and Services Tax (GST) regime to realize its goal of developing a gas-based economy and increasing its share in the basket. India’s energy.
Natural gas is currently outside of the GST margin and applicable taxes such as central excise tax, state VAT and central sales tax continue to be imposed on the fuel.
In its pre-budgetary memorandum with the finance ministry, the Federation of Indian Petroleum Industries (FIPI), also requested the rationalization of GST on pipeline transportation of natural gas as well as the regasification of imported LNG. imports to help reduce environmental costs. friendly fuel.
The government has set a target of raising the share of natural gas in the country’s primary energy basket to 15% by 2030, from 6.2% today. Using more natural gas will cut fuel costs as well as reduce carbon emissions, helping the country meet its COP-26 commitments.
“The exclusion of natural gas under the GST regime is having a negative impact on natural gas prices as gas producers/suppliers are taxed and is also impacting the natural gas producing industries. due to inheritance tax. , ” said FIPI.
Value added tax or VAT on natural gas is very high in some states like Andhra Pradesh, taxing 24.5%, Uttar Pradesh 14.5%, Gujarat 15% and Madhya Pradesh 14%.
The inclusion of natural gas in GST is necessary to provide uniform tax rates and encourage free trade across the country without any tax anomalies. “This is one of the important premises for the development of domestic gas exchange,” it said.
